Tesla Loses $2,000 California Clean Vehicle Rebate Because It Raised Prices

Tesla Model 3Image: Tesla

Tesla raised it prices twice this month: The week of March 10, it was reported that prices on the long-range Model 3 and Y increased by $1,000. Just a week later, Tesla hit its whole lineup with an increase of five to ten percent. Both of these increases were attributed to the rising costs of raw materials. Aside from the consumer outcry, it looks like those increases are going to take away some of the rebates that made their MSRPs cheaper. Cars Direct reports the increased prices have made Tesla ineligible for the California Clean Vehicle Rebate.

If you aren’t familiar with the CVRP (California Clean Vehicle Rebate Project), it’s a rebate that eligible clean vehicles qualify for. There are other parameters of course, like household income and the make and model of the vehicle, and you get a little extra if you’re a low-income buyer. (Though this part is largely pointless as the people that the program considers low income are people on Section 8, SSI, or cash assistance, and most EVs on the market are priced out of their reach.) A few months after buying a qualifying vehicle, you’ll see a check in the mail for whatever rebate you qualified for. With the Model 3 and Y, both had always qualified for rebates of $2,000 each since they were below the MSRP cap for the program: cars have an MSRP cap of $45,000; SUVs, trucks, and vans get a $60,000 cap. That cap is based on the base price of a model.

…a $70,000 Ford Mustang Mach-E GT Performance still qualifies since the cheapest Mach-E remains well below the $60,000 MSRP cap.

Tesla’s new prices put a base Model 3 starting at $46,990; the Model Y starts at $62,990. Both are now over the eligibility cap, wiping out that potential $2,000 savings that may have attracted consumers in the first place.

A CVRP rep confirmed the loss of the rebates for Tesla to Cars Direct, but gave a bit of good news for buyers who placed an order before the second price increase:

Tesla customers who ordered their vehicle on or before March 15th will still be eligible for the $2,000 rebate. Everyone else stands to pay $2,000 more than they would have just last week. A CVRP representative confirmed for CarsDirect this morning that eligibility is based on the order date, not the delivery date.

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Now, the only way for the 3 and Y to be eligible again would be to lower their prices, and we all know that won’t happen. Maybe it’s for the best though. It never sat right with me that, given the average transaction price of EVs, taxpayer money was being used to incentivize the purchase of something most buyers of EVs can afford without the incentive.